Finality Threshold

The finality threshold is the point at which a transaction is considered irreversible by the network. In some systems, this is a probabilistic threshold based on the number of blocks added after the transaction.

In others, it is a deterministic point defined by a consensus checkpoint. For financial derivatives and high-value settlements, reaching finality quickly is crucial to minimize counterparty risk.

Without clear finality, assets cannot be safely moved or traded. Different protocols offer different guarantees regarding how long it takes to reach this state.

It is a critical metric for assessing the usability of a blockchain.